Government to create master list of Economic offenders to thwart flight risks

India had serious problem in identifying the serious economic offenders for a long time. The scale of their offenses used to come to light to investigation agencies and media when offenders had already flown away from the country. Some 31 suspected economic offenders have fled the country to avoid prosecution. The people on the list include Nirav Modi‘s wife Ami Nirav Modi and son Neeshal Modi, liquor baron Vijay Mallya, cricket czar Lalit Modi and arms dealer Sanjay Bhandari. According to the officials from investigation agencies, “the government wants to create a master list of all economic offenders in the country so as to sharpen its response to such offenses, and to also prevent flight, and has asked all federal investigative and enforcement agencies to work together to create one list.” The Central Economic Intelligence Bureau (CEIB) which is an intelligence agency responsible for gathering information and monitoring the economic and financial sectors for economic offenses and warfare has been entrusted with the task to create the list. All other economic offense investigation agencies such as the Enforcement Directorate, CBI, capital markets regulator SEBI, the tax department, the customs department, and the Directorate of Revenue Intelligence will be providing inputs for the list.

Earlier, there used to be confusion and contention among the investigation agencies because all of them did not work in a synchronized manner. The reason behind this is that all the agencies have different mandates and their working style is different although these agencies used to cooperate in many big cases but the cooperation was optimal. “Most of our probe and enforcement agencies work in silos. So if a particular agency is investigating someone, a comprehensive list of economic offenders will help it know if the person on any other agency’s radar,” said an official in one of the enforcement agencies who asked not to be identified. Sometimes two or three investigation agencies used to probe the same person or corporation without knowing that the other agency is doing the same and without sharing any information. This multiplied the workload and the time and money invested in probing.

“This will be the first step towards identifying those committing multiple economic offenses and could be a potential fugitive. This will lead to a coordinated and focused investigation in case a big scam is unearthed,” said an official in the tax department who asked not to be identified. A threshold in terms of money has been set for each investigation agency above which the agency must report the case to CEIB. The list of offenses that make a person an economic offender include violations of laws such as the Central Excise Act, Customs Act, Prevention of Money Laundering Act, Negotiable Instruments Act, the Reserve Bank of India Act, Prohibition of Benami Property Transactions Act and, of course, provisions of the Indian Penal Code.

Last week, Lok Sabha passed The Fugitive Economic Offenders Bill which addresses the issue of economic offenders like Vijay Mallya and Nirav Modi who had fled the country to avoid prosecution. This bill allows the enforcement agencies to confiscate and sell the properties of the economic offenders who have flown from the country. As per this ordinance, if the person is not returning to the country then the selling of properties could happen even before the crime is proved. This step by the government to keep a close eye on prospective offenders through the master list will allow the agencies to identify them before they could fly away from the country.